Patterns: SGD/JPY ZAR/JPY

SGD/JPY 1H Chart: Pair breaches medium-term wedge

Upside momentum has driven the SGD/JPY exchange rate since mid March. This movement has been constrained in a wedge-like formation, as the Singapore Dollar has been gradually diminishing its trading range against the Yen.

This pattern was breached on Tuesday which should point to a further decline south. In addition, the pair moved below the 55-, 100– and 200-hour SMAs—a likewise bearish indication.

It is expected that the current period of consolidation ends in the nearest time, thus allowing the Singapore Dollar to weaken against its Japanese counterpart. This scenario is likewise supported by bearish technical indicators within the following week.

The nearest support is provided by the weekly S1, the monthly PP and the 38.20% Fibonacci retracement near 81.80, while resistance is set by the all three SMAs at 82.40. It is likely that the pair does not stop at 81.80, but continues to depreciate for a longer period of time.

ZAR/JPY 1H Chart: Rand expected to return in pattern

ZAR/JPY's movement during the past three weeks has been bounded by a descending channel. This pattern guided the pair out of a five-month falling wedge earlier this week.

The Rand has since remained near the breached pattern, thus fluctuating between the weekly and monthly S1s in the 8.65/74 area. Despite this breakout, technical indicators nevertheless remain bullish in the medium term. This should result in a move above the 55-, 100– and 200-hour SMAs and a possible test of the upper wedge line near 8.90.

In the short term, however, the given pair might still feel some bearish pressure from the aforementioned moving averages or the weekly and monthly PPs at 8.45. This minor fall could be stopped by the weekly S2 at 8.60 before the bullish sentiment takes over and pushes the South African Rand north again.